August 11, 2026/Cordros Report
In this note, we update our view on Guinness Nigeria Plc (GUINNESS), following the release of its H1-26 results. During the period, revenue grew by 11.8% y/y, EBITDA margin expanded by 89bps y/y to 18.8%, and EPS increased by 53.3% y/y to NGN11.55. Following our review, we estimate revenue growth of 16.0% y/y in 2026E, and EPS growth of 25.2% y/y to NGN23.70/s. Our forecasts reflect continued benefit from price increases, a gradual volume recovery, and a sharp decline in finance costs (-55.7% y/y). Accordingly, we model a target price (TP) of NGN355.03/s, implying a 5.6% downside from current price of NGN376.00/s, and assign a “HOLD” rating on the stock. We also forecast a 2026E DPS of NGN19.02, translating to a dividend yield of 5.1% based on current price. On our 2026E estimates, GUINNESS trades at a 2026E P/E of 15.9x and EV/EBITDA of 8.6x relative to MEA peer averages of 16.5x and 8.2x, respectively.
Topline growth and lower finance costs to support earnings: We forecast revenue growth of 16.0% y/y in 2026E (JAN-25 to DEC-25: +13.1% y/y), reflecting a gradual volume recovery and higher pricing. We expect volumes to improve on higher distributor purchase targets, continued portfolio innovation, and broader route-to-market expansion. On cost, we expect cost pressures to remain elevated in 2026E, with COGS and OPEX forecast to rise by 15.1% y/y and 24.8% y/y, respectively (JAN-25 to DEC-25: -3.9% y/y and +10.0% y/y, respectively), reflecting higher production input costs and sustained spending on marketing and distribution to support brand visibility and route-to-market expansion. Consequently, we forecast EBITDA margin to moderate by 102bps y/y to 18.5%. Below the operating line, we forecast a 55.7% y/y decline in net finance costs to NGN6.08 billion (JAN-25 to DEC-25: NGN13.73 billion), primarily reflecting a lower debt balance (2026E: NGN24.59 billion | JAN-25 to DEC-25: NGN44.59 billion). Accordingly, we forecast PBT growth of 24.2% y/y, while EPS is expected to increase by 25.2% y/y to NGN23.70.
Positive retained earnings to sustain dividend payouts: GUINNESS eliminated its retained losses in H1-26, as PAT of NGN25.30 billion lifted retained earnings to NGN15.70 billion (JAN-25 to DEC-25: accumulated loss of NGN5.22 billion). The return to a positive retained earnings balance supported GUINNESS’ resumption of dividend payments, with the company declaring cumulative interim dividends of NGN9.00/s in H1-26 (Q1-26: NGN2.00/s; Q2-26: NGN7.00/s), its first payout since 2022FY. We forecast a final dividend of NGN10.00/s, bringing total 2026E DPS to NGN19.00/s and implying a cumulative dividend yield of 5.1% for the period (based on current price of NGN376.00). Beyond 2026E, we expect continued earnings growth and the rebuilding of retained earnings to support further increases in shareholder distributions, with DPS projected to rise to NGN25.51/s in 2027E (+6.8% y/y).
Valuation: Our target price is NGN355.03/s, derived from a 50/50 blend of DCF and sector relative valuation estimates. Our DCF FV is derived from an equal blend of FCFF (NGN334.53/s) and FCFE (NGN322.54/s) estimates, assuming a 22.0% WACC, 21.8% CoE and 4.0% terminal growth rate. Similarly, our multiple based FV was derived from an equal blend of EV/EBITDA (NGN372.55/s) and P/E (NGN390.47/s) estimates, utilising MEA peer averages for both factors (8.2x and 16.5x, respectively) as multipliers.